Bulgaria Enters EU with 14% Poverty Rate, 20% Grey Economy, Official Statistics Show

Q: What are the main challenges to national statistics ensuing from Bulgaria’s entry into the EU?

A: The number one challenge is quality, which does not imply that NSI data are inaccurate. A European Statistics Code of Practice was published in 2005 - a document we are bound to strictly comply with. In addition to time limits, the document includes the obligation for statistics to provide analysis. We are planning to have two units with analytical groups dealing with demographic and macroeconomic analyses. The time limit for implementing the Code’s requirements is 2012. As to the NSI in particular, administrative reform is the main challenge.

Q: What do you mean?

A: One of the key problems now is the lack of administrative registers. For example, the Education Ministry has no database of the number of school students. That is why our experts at the territorial subunits have to go round the schools. In addition, the NSI’s current structure - a head office and 28 territorial offices - results in superfluous administration.

Q: Do you mean there will be downsizing?

A: No. A Phare project envisages creating remote directorates in the six planning regions, which will replace the territorial units. The redundant employees will be transferred to the head office, where there is a staff shortage. This is particularly relevant in view of our plans to make analyses and maintain an online database.

Q: Could you give the earliest date when the NSI can implement administrative reform?

A: We will submit a six-year strategy adjusted to the European strategy until 2012 to the Council of Ministers by the end of January. The document includes the timeline of setting up the remote directorates.

Q: How much financing has been planned for the six-year period and what is its source?

A: The financing needed is 46 million leva, of which over 20 per cent will be provided under the Phare Programme, for example, for the statistical register project.

Q: When will online data provision become possible?

A: The NSI has a regional, predominantly demographic, database. Other data are being entered and will be released on a thematic basis, e.g. financial and non-financial statistics.

Q: What is Bulgaria’s poverty rate on its entry into the EU?

A: It is 14 per cent according to our data based on the European method for calculation on the basis of expenses, not of incomes as is the case with the US method.

Q: What progress has been made in the NSI and Gallup survey for determining the poverty line according to European standards and methods?

A: It depends on which of the three European methods is adopted. This is about the weight of the expenses of the head of the household, the wife and the children. In Bulgaria it is assumed that the head of the household makes the largest portion of expenses, while a child accounts for 0.25 per cent of them, i.e. most expenses are made by one member of the household. The use of different models will not cause sizable differences in the poverty rate - 14.2 per cent or 14.8 per cent, depending on the model used.

Q: Will there be changes in the large consumer basket?

A: The draft consumer basket will contain 528 commodities in 2007, instead of 531, and 19 commodities will be replaced. For instance, the 330-ml bottle of de luxe Bulgarian beer is replaced by a 500-ml bottle; A-92 unleaded petrol is replaced by A-95; the CD player will be replaced by an mp3 player. The rule is that replacements are found for little or no longer used commodities.

In 2008, the NSI will start publishing two inflation indices. One is national, and the other will be calculated using the same method but will include products common to the whole of Europe.

Q: Will the time come when Bulgarians will be able to use an online calculator of their household’s inflation over a cup of coffee? This has recently become possible in Britain.

A: We are looking into this, but we must finish working on the consumer basket first.

Q: Could you cite the percentage of the grey economy at the time of Bulgaria’s entry into the EU?

A: With the proviso that the grey economy is beyond the scope of official statistics, I would put it at about 20 per cent, speaking as an expert, not as a statistician. Mirror studies based on customs declarations in Bulgaria and another country show glaring examples of goods worth millions of dollars, which disappeared after being imported in or exported from Bulgaria.

Q: Where does Bulgaria stand in Europe in terms of the grey economy?

A: A British colleague statistician once told me that when he said the grey economy in his country was about 7 or 8 per cent, he caused an outcry because three million unregistered workers enter Britain every year. In any case, the proportion of the grey economy in the European countries is two or three times smaller than in Bulgaria.

Q: What new observations will the NSI make in 2007?

A: The most interesting ones are of working conditions, the value of labour power, and social protection. I am talking about what is known as the poverty umbrella - how many Bulgarians it covers and how they are covered.

BTA Ekaterina Toteva